India1 Payments Ltd IPO

Upcoming DRHP

IPO Synopsis

IPO synopsis:
India1 Payments Ltd which was previously known as BTI Payments, filed their DRHP with SEBI. The issue comprises of a fresh issue worth Rs.150 crore and an offer for sale of up to 10,305,180 equity shares. Up to 25.08 lakh equity shares are being offloaded by BTI Payments Singapore, Banktech Group is offloading 1 lakh equity shares, India Advantage Fund S3 I is offloading around 49.94 lakh equity shares, India Advantage Fund S4 I is set to offload up to 24.86 lakh equity shares and lastly, Dynamic India Fund S4 US is planning on offloading 21.6 lakh equity shares in the OFS. 
According to the DRHP, the company is planning on a pre-IPO placement worth Rs.30 crore. The book running lead managers to the issue are IIFL Securities Ltd, JM Financial Ltd and Edelweiss Financial Services Ltd. 

Objectives of the issue:
1.    Rs.63.25 crore of the net proceeds is to be used for the repayment and prepayment of debt undertaken by the company 
2.    Rs.49.27 crore is to be used to fund capital expenditure requirements of the company for setting up ATMs
 

About India1 Payments Ltd

About the company:
The company was established in 2006, in Mumbai as Banktech India Pvt Ltd. Now, India1 Payments is the largest non-bank ATM operator, which is otherwise known as White label ATM operator, in the country. This is based on the number of ATM transactions in FY21. The company operates a vast network of 8,520 ATMs across 14 states and union territories, as of June 30, 2021. These ATMs are named “India1 ATM”. 
The company’s ATMs are concentrated in semi-urban and rural areas of the country and around 7,619 ATMs are located in these areas as of June 30, 2021. The company’s customers include people who are a debit card or credit card holder of any one of the 100 banks that are a part of the National Financial Switch which is operated by the National Payments Corporation of India. 
India1 Payments generates revenue on a per-transaction basis. They charge an interchange fee which is paid by the customer’s bank for processing the ATM transactions. The company charges Rs.15-17 for financial transactions and Rs.5-6 for non-financial transactions. 
The gross transaction value of cash transactions from the company’s ATMs for FY21 and Q1 ended 30 June 2021, stand at Rs.439.75 billion and Rs.136.39 billion respectively. According to the managing director and chief executive of India1 Payments, the company was able to increase their ATM network by 300 in the last four months. In August 2021, the company celebrated a milestone of 9,000 ATMs. The number of installed ATMs have grown at a CAGR of 2.4% between FY16 and FY21. 
 

Particulars

(In Rs cr)

FY21

FY20

FY19

Revenue from operations

317.6

256.05

229.3

PAT

3.4

-5.9

-24.19

PAT Margin

1.02%

-2.20%

-10.29%

EBITDA

145.52

111.35

87.94

EBITDA Margin

44.5%

41.84%

37.43%

EPS (In Rs)

1.12

-3.17

-13.07

 

Particulars

(In Rs cr)

FY21

FY20

FY19

Total Assets

1,449

868.5

722.98

Total Borrowings

914.7

472.6

489.9

Equity Share Capital

9.25

9.25

9.25

 

Peer Comparison

Company

Year of certification issuance

Status as of July 2021

Tata Communications Payment Solutions Ltd

2013

Operational

Hitachi Payment Serviced Pvt Ltd

2013

Operational

Vankrangee Ltd

2014

Operational

India1 Payments ltd

2014

Operational

Muthoot Finance Ltd

2014

In process of cancellation

SREI Infrastructure Finance Ltd

2014

Operations ceased

RiddhiSiddhi Bullions Ltd

2014

License revoked

AGS Transact Technologies Ltd

2014

License revoked

 


Key points of India1 Payments Ltd IPO- 

Key Points

  • Strengths

    1.    Their presence is focused in the semi-urban and rural areas (SURU) of the country and as of 30 June 2021, the company had 89.42% of its ATMs in the SURU regions and in the same period, 91.29% of the transactions were from customers located in the SURU regions
    2.    The company is the largest white label ATM operator in the country and is growing at a rapid rate. The ATM network grew from 8,520 as on 30 June 2021 to 9,000 in August 2021
    3.    The operating model has an aim of maximizing customer availability and keeping this in mind, the company has over 900 franchisees who oversee the operations of over 2,000 ATMs
    4.    The company has the support of the Banktech Group and a very skillful senior management group
     

  • Risks

    1.    The industry is highly regulated by the Reserve Bank of India, and if there is any implementation of a new rule or any changes to the existing laws and rules, it may adversely affect the business and operations of the company
    2.    The business of the company is wholly dependent on the ATM network and a constant growth of the network. Failure to do so, will result in degradation of the financial condition 
    3.    India1 Payments relies on RBI to give them the cash to operate the ATMs and if there is any delay or unavailability of this cash, it will adversely affect the operations of the business

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

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